Electric airplanes: The market, the challenges and the key players

A couple of days back, responding to a follower, Tesla (NASDAQ: TSLA) CEO Elon Musk said battery-powered electric airplanes could become a reality in another five years. How true can this be? Well, the Paris Air Show held last month and the recent developments in the aviation segment give us enough reasons to believe that Musk’s prediction, though outlandish, could easily come true.

In fact, electric airplanes are here already, thanks to some innovative global start-ups. Israel-based start-up Eviation Aircraft unveiled what is touted as the world’s first all-electric passenger airplane, named Alice, at the Paris Air Show. It’s not as big as the Boeing (NYSE: BA) or Airbus that you are used to, rather, it can carry only 11 people including two crew members.

The start-up claims that Alice has a range of around 600 miles (965 km) at 10,000 feet, and hence can be used for short-distance flights. Eviation, which was founded in 2015, estimates the cost of flying for one passenger at about $200.

The company is now keeping its fingers crossed on hopes of getting Federal Aviation Administration approval, upon completion of a series of test flights in Arizona. It has already received orders from Massachusetts-based Cape Air, and is hoping to fly commercially by 2022.

Electric aircraft is not really a novel concept. Three years ago, Slovenia-based Pipistrel unveiled a prototype two-seater, Alpha Electro, that can cover 160 kilometers in a single charge. The company says around 40 of these mini-crafts have been shipped to clients across the world.

The weight paradox

While these mini airplanes offer a promising beginning, the challenge becomes exponential as the size increases. This is because the larger ones would require more powerful batteries, which tend to be very heavy and add to the airplane’s overall weight. This weight paradox’s solution holds the key to emission-free flying.      

One way to overcome this difficulty, though not the ideal one, is by using hybrid engines, which uses both fuel and electricity. This is where Los Angeles-based Ampaire has been trying to score. It’s six-seater Ampaire 337 is based on Cessna 337 Skymaster, but combined with an electric propulsion system.

The twin-engine 337, which was tested last month at the Camarillo Airport, is said to have a range of around 100 miles (160 kilometers). Commercial operations are expected by 2021.

Other aviation start-ups that are hoping to make it big include Los Angeles-based Wright Electric, which is working on a commercial aircraft with a range of 300 miles, and Santa Cruz-based Joby Aviation, which is also pursuing similar dreams.

Giants seek alliance

Aircraft manufacturing giants, Boeing and Airbus, are not entirely missing out on all the action. In fact, they are forging partnerships to make their contribution. Airbus has partnered with the SAS Scandinavian Airlines to jointly develop an ecosystem for electric and hybrid airplanes.

Boeing, meanwhile, has joined forces with Washington-based start-up Zunum Aero to build an all-electric flight that can carry 50 passengers at a time. These are, of course, long-term projects.

READ: American Airlines stock hits a 3-year low, yet risks galore

The implications

The amount of work that is going into the development of electric airplanes has many implications. Just like how electric cars have been disruptive to the automobile industry, the aviation industry would see a similar effect in the years to come.

The fact that start-ups are doing so exceptionally well underpins that possibility of changing market equations in another five years.  

It would also massively cut the travel costs as fuel expenses make up a major chunk of airfares. The total fuel costs for the global airline industry is projected to increase to 206 billion this year, from 180 billion in 2018. Lastly, let’s not to forget the reduction in greenhouse gas emission from these aircraft.

The orders for electrically powered aircraft are expected to touch three-digit figures within the next five years. We are almost there.  

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